Warren Buffett is a huge advocate of businesses buying back their shares. He believes that share buybacks can reveal a thing or two about the company’s management.
He once said:
“What you’d like to do as an investor is hook them up to a machine and run a polygraph to see whether it’s true. Short of a polygraph the best sign of a shareholder-oriented management — assuming its stock is undervalued — is repurchases. A polygraph proxy, that’s what it is.”
On that note, let’s check out three companies picked at random that have bought back their shares thus far during the week, as of market open today.
CapitaLand Limited (SGX: C31)
CapitaLand is one of Asia’s largest real estate firms with a global portfolio of assets such as integrated developments, shopping malls, and offices.
On 2, 3, 4 and 5 April 2018, the property outfit bought back a total of 8,369,000 shares at a price range of between S$3.57 and S$3.62 per share. The total cost came up to around S$30.2 million.
CapitaLand’s shares closed at S$3.58 on Thursday. This translates to a price-to-book (PB) ratio of 0.8 and a dividend yield of 3.4%.
Oversea-Chinese Banking Corporation Limited (SGX: O39)
Oversea-Chinese Banking Corporation, or OCBC for short, is the longest established local bank and is the second largest financial services group in Southeast Asia by assets.
On 2, 3, 4 and 5 April, OCBC repurchased 800,000 shares at a price range of between S$12.52 and S$12.79 apiece. The total cost was slightly above S$10.1 million.
Shares of OCBC ended Thursday at $12.56, giving a PB ratio of 1.4 and a dividend yield of 3%.
Starburst Holdings Ltd (SGX: 40D)
According to its website, Starburst Holdings specialises in the “design and engineering of firearms-training facilities and the design, fabrication, installation and maintenance of anti-ricochet ballistic protection systems for firearm shooting ranges and tactical training mock-ups”.
On 2, 3, 4 and 5 April, the firm bought back a total of 700,800 shares ranging from S$0.395 to S$0.41 per share, amounting to a total cost of around S$285,600.
Starburst closed at S$0.415 apiece on Thursday. The firm is trading at a whopping 741 times its trailing earnings with a dividend yield of 0.6%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P does not own shares in any companies mentioned.